This podcast episode discusses the challenges faced by the combination of negative surprises in economic growth and positive surprises in inflation, preventing the Federal Reserve from cutting interest rates. The yield curve, which remains significantly inverted, serves as an indicator of interest rate policy and has led to crowding out in various sectors of the economy. The underperformance of small-cap stocks indicates the impact on consumers. The recommendation is to maintain a quality curve barbell approach and include defensive exposure to hedge against the risk of a recession.
